County defers Wildomar, Menifee repayments

Wildomar and Menifee can postpone repayment of hundreds of thousands of dollars they owe Riverside County, the Board of Supervisors decided this week.

When the two communities became cities in 2008, the county helped them out early on by continuing to providing each with more than $1 million worth of essential services during the transition period, with the understanding the cities would repay the debt within five years.

But the poor economy combined with a huge state budget hit on the two cities left them with much less revenue than had been anticipated in the financial analyses that paved the way for cityhood.

Under the repayment plans approved unanimously on Tuesday by the supervisors, both cities will start repaying their debts, but will have eight years to fully erase the red ink.

Wildomar benefits the most from deferring the repayment of the $1.8 million it owes the county because, being much smaller than Menifee, it was hit much harder proportionately by the revenue loss.

Wildomar City Manager Gary Nordquist said that purely from a numbers standpoint, the city could pay the debt now.

"However, if we did that, we would have exhausted all of our reserves, so we don't recommend that we do that" he said.

Menifee Finance Director Terri Willoughby said that although repaying the full $1.1 million would not deplete the city's reserves, it would be a strain.

"It would obviously be a hardship for us if we had to pay it all," she said.

The plan for Menifee calls for it to pay at least $100,000 annually from the fiscal year starting July 2015 through June 2021 to cover about $600,000 of the debt. The remainder is due in September 2018.

Wildomar is required to pay $383,243 by July 1, plus at least $100,000 in each fiscal year through June 2021, when any outstanding debt must be repaid.

The supervisors' action comes nearly a year after the board first was poised to consider the deferments. The consideration was postponed because of hope among city officials that the state government might restore some of the money it had taken.

Wildomar lost about $2 million, nearly a quarter of its general fund budget, and Menifee lost nearly $4 million, 16 percent of its general fund, when the state in 2011 diverted motor vehicle license fees from cities to a law enforcement program.

"We asked the county to give us some timelines that are appropriate for what really happened," Wildomar City Councilman Bob Cashman said. "They're still getting their money. They get paid back. ... If the state were to simply throw money at us, we might decide we don't even need this, but I haven't seen any money falling out of the sky from the state."

Wildomar Mayor Tim Walker said he hopes the city can erase the debt as soon as possible.

"If everything goes like I'm thinking it will go, we'll probably be able to pay it back quicker," he said. "My plan is to try to grow ourselves out of this problem with this money flow."